Tuesday, April 26–Jim Wyckoff’s Morning Markets Report
Global stock markets were mixed overnight. U.S. stock indexes are pointed toward lower openings when the New York day session begins. Traders and investors are uneasy early this week as China continues to lock down its major cities to prevent the spread of Covid. That’s leading many to think China’s economy, the second largest in the world, will suffer significantly this year, including more supply chain disruptions in Asia and around the globe.
Following are some headlines coming out of Asia Tuesday morning:
Covid Lockdowns Send China’s Economy Reeling as Outbreaks Spread
Xi Puts Ideology Before Economy With Market-Busting Lockdowns
Global Supply Chain Crisis Flares Up Again Where It All Began
Beijing to Covid Test Most of City as Lockdown Specter Looms
China Central Bank Seeks to Calm Markets with Support Pledge
The Russia-Ukraine war has also heightened risk aversion in the marketplace the past several weeks. A top Russian government official today said the U.S. and Russia risk nuclear war.
Inflation worries remain on the front burner of the global marketplace.
This week is the U.S. busiest corporate earnings week of the quarter, which will help drive stock prices.
The key outside markets see Nymex crude oil futures prices near steady today and trading around $98.50 a barrel. The U.S. dollar index is higher and hit another two-year high early today. The yield on the 10-year U.S. Treasury note is presently fetching 2.79%.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and chain store retail indexes, durable goods orders, the Core Logic-Case Shiller home price indexes, the Richmond Fed business survey, the monthly house price index, the consumer confidence index, and new residential sales.
–Jim
U.S. STOCK INDEXES
June S&P 500 e-mini futures: Prices are weaker in early U.S. trading. Prices are trending down on the daily bar chart. The shorter-term moving averages (4-, 9- and 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators (RSI, slow stochastics) are neutral to bearish early today. Today, shorter-term technical resistance comes in at the overnight high of 4,303.50 and then at 4,350.00. Support for active traders is seen at 4,250.00 and then at this week’s low of 4,195.25. Wyckoff’s Intra-day Market Rating: 4.0
June Nasdaq index futures: Prices are weaker in early U.S. trading. Prices are trending down on the daily bar chart. Shorter-term moving averages (4- 9-and 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day average is below the 18-day. Short-term oscillators (RSI, slow stochastics) are neutral early today. Shorter-term technical resistance is seen at the overnight high of 13,583.75 and then at 13,781.00. On the downside, shorter-term support is seen at this week’s low of 13,184.00 and then at 13,000.00. Wyckoff’s Intra-Day Market Rating: 4.0.
U.S. TREASURY BONDS AND NOTES FUTURES
June U.S. T-Bonds: Prices are higher in early U.S. trading on short covering. Bears are still in solid technical control. Shorter-term moving averages (4- 9- 18-day) are neutral early today. The 4-day moving average is even with the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term technical resistance is seen at this week’s high of 142 12/32 and then at 143 even. Shorter-term support lies at the overnight low of 141 even and then at this week’s low of 139 28/32. Wyckoff’s Intra-Day Market Rating: 5.5
June U.S. T-Notes: Prices are higher in early U.S. trading, on short covering. Bears are still in solid near-term technical control. Shorter-term moving averages (4- 9- 18-day) are bearish early today. The 4-day moving average is below the 9-day. The 9-day is below the 18-day moving average. Oscillators (RSI, slow stochastics) are bullish early today. Shorter-term resistance lies at this week’s high of 120.06.0 and then at 120.16.0. Shorter-term technical support lies at the overnight low of 119.07.5 and then at 119.00.0. Sell stops likely reside just below those levels. Wyckoff’s Intra-Day Market Rating: 6.0
EURO CURRENCY
The June Euro currency futures are lower and hit another contract low in early U.S. trading. Bears have the solid overall near-term technical advantage. The shorter-term moving averages for the Euro are bearish early today, as the 4-day is below the 9-day. The 9-day is below the 18-day moving average. Short-term oscillators for the Euro are bearish early today. The Euro currency finds shorter-term technical resistance at 1.0800 and then at this week’s high of 1.0840. Shorter-term support is seen at the overnight contract low of 1.0693 and then at 1.0650. Wyckoff’s Intra Day Market Rating: 4.0
NYMEX CRUDE OIL
Nymex crude oil prices are near steady in early U.S. trading. The shorter-term moving averages are neutral early today as the 4-day is below the 9-day. The 9-day is above the 18-day moving average. Short-term oscillators (RSI and slow stochastics) are neutral to bearish early today. Look for buy stops to reside just above technical resistance at $100.00 and then at this week’s high of $101.55. Look for sell stops just below technical support at the overnight low of $97.06 and then at this week’s low of $95.28. Wyckoff’s Intra-Day Market Rating: 5.0
GRAINS
U.S. grain futures prices were firmer in early U.S. pre-market trading. Corn and soybean bulls have the solid overall near-term technical advantage. Wheat bulls have faded. However, here’s an important observation from Monday’s price action. The grains, while not posting solid price gains, were able to hold stable to a bit weaker when most of the rest of the raw commodity futures markets were selling off sharply. This suggests significant underlying strength in the grain futures markets, which in turn provides a clue that the grains are likely to make another run to the upside in the coming weeks.
IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any traders and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature.
Here is what the Commodity Futures Trading Commission
(CFTC) has said about futures trading (and I agree 100%):
1. Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you.
Jim Wyckoff